Category Archives: Medicaid Recipients
RAC Audits: If It Walks Like a Duck and Quacks Like a Duck, It Is a Duck!
Today, I am going to talk about RAC audits. I know what you are thinking…don’t you always talk about RACs? Of course, you are going to talk about RAC audits. No. Today, I’m taking this blog in a different direction.
I want to talk about secret, hidden RAC audits. As you are aware, the federal regulations limit RACs from going back more than 3 years to audit claims. Juxtapose the UPICs, TPEs, SMRCs, MACs, OIG, and even State Medicaid agencies. Everyone, but the RACs are allowed more than a 3-year lookback period. Some, like OIG, have long lookback periods. Coincidentally, when a company responds to an RFP or a request for proposal from CMS to act as CMS’ vendor to conduct Medicare audits on America’s Medicare providers, a clause in the proposed contract between CMS and the vendor is highly argued or negotiated. Which clause in the vendor’s contract is most negotiated? I will tell you. The clause that states that the vendor is a RAC is most negotiated. Because if the vendor is called a UPIC instead of a RAC, the vendor has a longer lookback period. Being called a UPIC, suddenly, becomes a commodity. There are no laws mandating UPICs to a 3-year lookback period. All of a sudden, it is not hip to be a RAC.
Look into it. Do your research. The contracts are public record. Ask for Cotiviti’s contracts with CMS. Notice I said contracts, not contract. What I have realized over time is that a vendor may be hired by CMS to be a RAC auditor, but, once the vendor realizes the limit of 3 years, it goes back to CMS and asks if it can be considered an UPIC. Why? A UPIC can do everything that a RAC does; however, it gets an additional 3 years to lookback at claims and that means money. Cha-ching! Even Dr. Ron Hirsh commented today on RACMonitor about this story, which I presented this morning at 10:00am, as I present every Monday morning, live, on the national podcast RACMonitor , hosted by Chuck Buck and produced by MedLearn. If you want to listen to the podcast, click the following link: Nelson Mullins – Monitor Mondays Podcast Featuring Knicole Emanuel; Defeating Statistical Extrapolations, Expansion of Medicaid RACs, IPPS Final Rule, Smart Hospitals, and Physician Advisors Episodes
The podcast is also on video, but I don’t know how to view that. If you do, you would see my baby duck Biscuit on the screen. He joined me this morning to talk about, “What Walks Like a Duck and Quacks Like a Duck, Must be a Duck.” Dr. Hirsh commented that companies like Cotiviti have many, many contracts deeming Cotiviti many different acronyms. If you get a letter from Cotiviti, do not assume it is acting as a RAC. Instead, ask for the contract which allows Cotiviti to do what it purports to want to do.
I’ve noticed this trend in real life, but only for 10-20 individual cases, maybe 30. I have not had the time to draft a FOYIA request, and, quite frankly, my name on a FOYIA request nowadays result in a response that says, something to the effect of, use discovery instead. Even though my personal experiences should not be extrapolated across the country because that would be inappropriate and judgmental, I will give an example and you may extrapolate or not. There is a company that has been doing RAC audits in NC for the last 5-8 years. It is called Public Consulting Group (“PCG”). PCG and I go way back. If you are a longtime listener of RACMonitor, you will recall that Ed Roche and I presented numerous podcasts about the debacle in NM in 2013. The State of NM put 15 Medicaid providers who constituted 87.6% of the BH providers in NM at the time. The consequences were catastrophic; thousands were out of BH services overnight. There is even a documentary about the unraveling of BH in NM in 2013. The reason that these 15 BH providers were put out of business overnight was because of a NM vendor called PCG. PCG issued a report to NM after conducting Medicaid audits on these 15 BH facilities, which accused the 15 facilities of fraud. In 2013, PCG was considered a RAC per contract. Today, when I have a case against PCG and make the 3-year lookback period argument, I get a retort that it’s not a RAC. Instead it’s a UPIC.
To which I say, if it walks like a duck and talks like a duck, it is a duck.
SNFs Are on the Medicare Chopping Block! Caveat!
Every skilled nursing facility in the US will be subject to a five-claim audit starting THIS WEEK as regulators try to better assess and root out improper payments. Blah. Blah. Blah. The former is the first sentence in an article that is giving warning to skilled nursing facilities (“SNF”). But, we all know that PROPER PAYMENTS get caught in the wide net cast for improper payments. Innocent people get accused of crimes. Health care providers get accused of Medicare and Medicaid fraud or, at least, abhorrent billing.
The Centers for Medicare & Medicaid Services (“CMS”) announced the nationwide audits, which will be conducted by Medicare Administrative Contractors (“MACs”) on a rolling basis, with the MAC in every region required to pull five Medicare Part A claims from every facility they cover and review them for potential errors.
The results will lead to alleged overpayments, credible allegations of fraud, submittals to the OIG, and False Claims Act (“FCA”) penalties. The effort follows an HHS report that found skilled nursing facilities had the highest rate of improper payments, with nearly a quarter of those tied to insufficient documentation.
Most of the rest of my blog (except for what is important) is cut and pasted from the article (since I am not a journalist and cannot procure quotes):
“We haven’t seen anything like this in the recent past, at least not in the last 10 years,” said Stacy Baker, OTR/L, RAC-CT, director of audit services for Proactive LTC Consulting. “But it’s no surprise to see this sector-wide probe and educate. Looking back on Medicare FFS improper payment data, we’ve never seen SNF improper payment rates this high, and nearly doubling since the 2021 report.”
That rate stood at 15.1% in 2022, almost double the 7.79% rate in 2021. A CMS report blamed missing case-mix group component documentation. Baker billed the new initiative as an attempt to improve poor billing practices that emerged with the implementation of the Patient Driven Payment Model.
But the improper payments can’t be attributed to PDPM alone, said Alicia Cantinieri BSN, vice president of MDS policy and education for Zimmet Healthcare Services.
“That’s probably not the whole reason,” she said on a webinar earlier this month.
She noted that risk areas that could move providers to the front of the audit process include past performance, such as a history of additional documentation requests (“ADR”); frequent errors in Section GG, which sets payment rates for physical therapy, occupational and nursing groups; diagnoses without medical record to support MDS inclusion; and even illegible RN signatures. I bolded “even illegible RN signatures” because I cannot tell you how many times I have seen denials by auditors because they couldn’t read someone’s signature, and, therefore, could not verify their license. Have auditors heard of a phone?
The reviews will be conducted on a prepayment basis unless the provider requests post-payment review due to a financial burden. Holy cow! See blog, blog, and blog.
“Keep in mind, there’s lots of low-hanging fruit for payment error aside from PDPM accuracy, such as but not limited to, compliant SNF Certs and Recerts and physician oversight regs,” Baker added. “These components should be included in the Triple Check process as well.”
The CMG for each HIPPS code also must be clearly supported to validate the claim.
The MACs will complete one round of probe and educate for every provider, instead of that usual potential three rounds, as per their traditional TPE program.
It is a good idea for providers to start analyzing data and conducting internal self-audits.
TIPS for an effective ADR response:
- SECURE AN ATTORNEY WHO SPECIALIZES IN THIS TYPE OF LEGAL WORK.
- Develop a process and team now. Assign responsibilities for tasks such as, but not limited to: identifying ADR requests, ensuring timely response to deadlines are met, pulling together medical records and documents required to support the HIPPS code, and reviewing the packet for completeness.
- Make copies. Never ever, ever, ever send originals.
- Organize documentation to make the contractor’s review easy, labeling critical sections such as physician orders, MDS assessments, Section GG documentation and more.
- Allow sufficient time for your lawyers and hired experts, both with clinical and MDS coding expertise, to review the claims and documentation for accuracy. If your attorney believes that your documentation has concerning issues, it is best to SELF-DISCLOSE. Self-disclosure can prevent penalties; whereas if you are caught, penalties will ensue.
Ding Dong! PHE Is Dead!!!
The federal Public Health Emergency (PHE) for COVID-19, declared under Section 319 of the Public Health Service (PHS) Act, is expiring at the end of the day on May 11, 2023, today! This is huge. There have been thousands of exceptions and waivers due to COVID throughout the last 2 1/2 years. But on the end of the day on May 11, 2023…POOF….
Most exceptions or waivers will immediately cease.
The Department claims it has been working closely with partners—including Governors; state, local, Tribal, and territorial agencies; industry; and advocates—to ensure an orderly transition out of the COVID PHE.
Yesterday, HHS released a Fact Sheet. It is quite extensive, as it should be considering the amount of regulatory compliance changes that will happen overnight!
Since January 2021, COVID deaths have declined by 95% and hospitalizations are down nearly 91%.
There are some flexibilities and actions that will not be affected on May 11.
Access to COVID vaccinations and certain treatments, such as Paxlovid and Lagevrio, will generally not be affected.
At the end of the PHE on May 11, Americans will continue to be able to access COVID vaccines at no cost, just as they have during the COVID PHE. People will also continue to be able to access COVID treatments just as they have during the COVID PHE.
At some point, the federal government will no longer purchase or distribute COVID vaccines and treatments, payment, coverage, and access may change.
On April 18, 2023, HHS announced the “HHS Bridge Access Program for COVID-19 Vaccines and Treatments.” to maintain broad access to vaccines and treatments for uninsured Americans after the transition to the traditional health care market. For those with most types of private insurance, COVID vaccines recommended by the Advisory Committee on Immunization Practices (ACIP) are a preventive health service and will be fully covered without a co-pay when provided by an in-network provider. Currently, COVID vaccinations are covered under Medicare Part B without cost sharing, and this will continue. Medicare Advantage plans must also cover COVID vaccinations in-network without cost sharing, and this will continue. Medicaid will continue to cover COVID vaccinations without a co-pay or cost sharing through September 30, 2024, and will generally cover ACIP-recommended vaccines for most beneficiaries thereafter.
After the transition to the traditional health care market, out-of-pocket expenses for certain treatments, such as Paxlovid and Lagevrio, may change, depending on an individual’s health care coverage, similar to costs that one may experience for other covered drugs. Medicaid programs will continue to cover COVID treatments without cost sharing through September 30, 2024. After that, coverage and cost sharing may vary by state.
Major telehealth flexibilities will not be affected. The vast majority of current Medicare telehealth flexibilities that people with Medicare—particularly those in rural areas and others who struggle to find access to care—have come to rely upon throughout the PHE, will remain in place through December 2024. Plus, States already have significant flexibility with respect to covering and paying for Medicaid services delivered via telehealth. This flexibility was available prior to the COVID PHE and will continue to be available after the COVID PHE ends.
What will be affected by the end of the COVID-19 PHE:
Many COVID PHE flexibilities and policies have already been made permanent or otherwise extended for some time, with others expiring after May 11.
Certain Medicare and Medicaid waivers and broad flexibilities for health care providers are no longer necessary and will end. During the COVID PHE, CMS used a combination of emergency authority waivers, regulations, and sub-regulatory guidance to ensure and expand access to care and to give health care providers the flexibilities needed to help keep people safe. States, hospitals, nursing homes, and others are currently operating under hundreds of these waivers that affect care delivery and payment and that are integrated into patient care and provider systems. Many of these waivers and flexibilities were necessary to expand facility capacity for the health care system and to allow the health care system to weather the heightened strain created by COVID-19; given the current state of COVID-19, this excess capacity is no longer necessary.
For Medicaid, some additional COVID PHE waivers and flexibilities will end on May 11, while others will remain in place for six months following the end of the COVID PHE. But many of the Medicaid waivers and flexibilities, including those that support home and community-based services, are available for states to continue beyond the COVID PHE, if they choose to do so. For example, States have used COVID PHE-related flexibilities to increase the number of individuals served under a waiver, expand provider qualifications, and other flexibilities. Many of these options may be extended beyond the PHE.
Coverage for COVID-19 testing will change.
State Medicaid programs must provide coverage without cost sharing for COVID testing until the last day of the first calendar quarter that begins one year after the last day of the PHE. That means with the PHE ending on May 11, 2023, this mandatory coverage will end on September 30, 2024, after which coverage may vary by state.
The requirement for private insurance companies to cover COVID tests without cost sharing, both for OTC and laboratory tests, will end at the expiration of the PHE.
Certain COVID data reporting and surveillance will change. CDC COVID data surveillance has been a cornerstone of our response, and during the PHE, HHS had the authority to require lab test reporting for COVID. At the end of the COVID-19 PHE, HHS will no longer have this express authority to require this data from labs, which will affect the reporting of negative test results and impact the ability to calculate percent positivity for COVID tests in some jurisdictions. Hospital data reporting will continue as required by the CMS conditions of participation through April 30, 2024, but reporting will be reduced from the current daily reporting to weekly.
FDA’s ability to detect shortages of critical devices related to COVID-19 will be more limited. While FDA will still maintain its authority to detect and address other potential medical product shortages, it is seeking congressional authorization to extend the requirement for device manufacturers to notify FDA of interruptions and discontinuances of critical devices outside of a PHE which will strengthen the ability of FDA to help prevent or mitigate device shortages.
Public Readiness and Emergency Preparedness (PREP) Act liability protections will be amended. On April 14, 2023, HHS Secretary Becerra mailed all the governors announcing his intention to amend the PREP Act declaration to extend certain important protections that will continue to facilitate access to convenient and timely COVID vaccines, treatments, and tests for individuals.
More changes are occurring than what I can write in one, little blogpost. Know that auditors will be knocking on your doors, asking for dates of service during the PHE. Be sure to research the policies and exceptions that were pertinent during those DOS. This is imperative for defending yourself against auditors knocking on your doors.
And, as always, lawyer-up fast!
And just like the Wicked With of the West, DING DONG! The PHE is dead.
NC Medicaid Expansion: More Consumers, Not More Providers!
Republican-run Congress passed Medicaid expansion today, March 23, 2023.
Today North Carolina took a commendable step forward in healthcare by expanding Medicaid to cover more low-income individuals. Now there are 10 States that have not expanded Medicaid. This decision will provide much-needed healthcare coverage to over 600,000 people in the state who previously did not have access to affordable healthcare. North Carolina has 2.9 million enrollees in traditional Medicaid coverage. Advocates have estimated that expansion could help 600,000 adults. In theory. On paper.
As a legal professional, I commend the North Carolina lawmakers for making this decision. The expansion of Medicaid will go a long way in improving the health and wellbeing of North Carolinians. It is well known that access to quality healthcare is critical for people to lead healthy and productive lives. By expanding Medicaid, the state is taking a proactive step towards ensuring that its citizens have access to the healthcare they need.
However, it is important to note that despite this expansion, many healthcare providers still do not accept Medicaid due to low reimbursement rates and regulatory burdens. This is a major issue that must be addressed if the benefits of the expansion are to be fully realized.
According to a report by the Kaiser Family Foundation, Medicaid patients often face significant challenges in accessing healthcare services due to a shortage of healthcare providers who accept Medicaid. In North Carolina, as of 2021, only 52% of primary care physicians accept Medicaid patients, while only 45% of specialists accept Medicaid patients. 600,000 North Carolinians will get a Medicaid card. A card does not guarantee health care services. See blog.
One area that has been severely impacted by the shortage of Medicaid providers is dental care. According to the American Dental Association, only 38% of dentists in the United States accept Medicaid patients. This has led to many low-income individuals going without essential dental care, which can lead to more serious health issues down the line. Remember, Deamante Driver? See blog.
Another area that has been impacted by the shortage of Medicaid providers is nursing homes. In many cases, nursing homes that accept Medicaid patients struggle to find healthcare providers willing to provide care to their residents. This can lead to residents going without essential medical care, which can have severe consequences.
Specialists are another area where the shortage of Medicaid providers is particularly acute. According to the Kaiser Family Foundation, only 45% of specialists accept Medicaid patients. This can be especially challenging for patients with complex medical needs, who often require specialized care.
The shortage of Medicaid providers is a complex issue that requires a multifaceted solution. One approach is to increase reimbursement rates for healthcare providers who accept Medicaid patients. This would incentivize more healthcare providers to accept Medicaid patients, thereby increasing access to healthcare services for low-income individuals.
Another approach is to reduce regulatory burdens for healthcare providers. This would make it easier for healthcare providers to participate in Medicaid, thereby increasing access to healthcare services for low-income individuals.
These statistics highlight the urgent need to address the issue of low reimbursement rates and regulatory burdens faced by healthcare providers. If more providers are incentivized to accept Medicaid patients, more people will have access to the care they need, and the benefits of the expansion will be fully realized.
In conclusion, North Carolina’s decision to expand Medicaid is a significant step forward in healthcare, and it should be applauded. However, it is crucial that policy change to incentivize providers to accept Medicaid. From dental care to nursing homes and specialists, low-income individuals who rely on Medicaid face significant challenges in accessing essential healthcare services.
CHIP v. Medicaid: What’s the Difference?
As you know, many States have expanded Medicaid. I am not saying whether that is good or bad. Just that some have expanded and some States have not. NC is one that has not expanded Medicaid. NC’s Department for Medicaid received a Waiver from CMS to extend Medicaid and the Children’s Health Insurance Program (CHIP) coverage for 12 months after pregnancy. As a result, up to an additional 28,000 people will now be eligible for Medicaid or CHIP for a full year after pregnancy in North Carolina. CMS gave its blessing or Waiver to 24 States. An estimated 361,000 Americans annually are now eligible for 12 months of postpartum coverage. If all states adopted this option, as many as 720,000 people across the United States would be guaranteed Medicaid and CHIP coverage for 12 months after pregnancy.
CHIP piggybacks Medicaid for children. Not adults. But so does EPSDT. The Early and Periodic Screening, Diagnostic and Treatment (EPSDT) benefit provides comprehensive and preventive health care services for children under age 21 who are enrolled in Medicaid. As a hospital or any provider, if you serve children and get your claims denied, EPSDT should overturn your denials. Check your compliance department. If claims are getting denied for children 21 years of age or younger, then you should be disputing these denials based on EPSDT.
CHIP differs from Medicaid EPSDT. There can be premiums or cost sharing with CHIP. CHIP is also a pre-set amount; whereas, Medicaid EPSDT creates exceptions for those in need under 21.
CHIP was designed to cover children who fall outside of Medicaid eligibility, but who otherwise were not able to be insured through a family plan. This program vastly increased the number of children eligible for health insurance. However, CHIP is not governed by the same legislation as Medicaid and offers drastically different levels of coverage.
Certain states have different names for their Medicaid and CHIP programs. For example, in California, both programs are called Medi-Cal. In Georgia, Medicaid is called Georgia Medical Assistance, and their CHIP program is called PeachCare for Kids.
Medicaid and CHIP provide 51% of health care to our nation’s youth – more than 40 million children.
In the last few months, CMS has published numerous bulletins regarding the importance of EPSDT, especially germane to mental health.
NC Medicaid OVERHAULED!
NC Medicaid is getting a complete overhaul. Politically, everyone is lost and has no idea how this will work. Back in 2010-ish, when NC went to the MCO model, which we have now, hundreds of providers were not paid or had trouble getting paid until the “dust” settled, and the MCOs were familiar with their jobs. Providers continue to suffer nonpayment from MCOs.
The new model consists of two, separate models: (1) the Standard Plan; and (2) the Tailored Plan models.
What’s the difference?
The Tailored Plan
Applies to:
- People who get Innovations Waiver services
- People who get Traumatic Brain Injury (TBI) Waiver services
- People who may have a mental health disorder,substance use disorder, intellectual /developmental disability (I/DD) or traumatic brain injury (TBI).
The Standard Plan
Applies to everyone else. It is normal, physical Medicaid.
December 1, 2022, is the “go-live” date for the Tailored Plans.
Unlike the MCO model, the Tailored Plan offers physical health, pharmacy, care management and behavioral health services. It is for members who may have significant mental health needs, severe substance use disorders, intellectual/developmental disabilities (I/DDs) or traumatic brain injuries (TBIs). Tailored Plans offer added services for members who qualify. DHHS is trying to distance itself from any Medicaid administration by hiring all these private companies to manage Medicaid for DHHS. DHHS has to get federal Waivers to do this.
The MCOs are taking on a new function. Starting December 1, 2022, the MCOs will be managing physical care, as well as mental health and substance abuse.
I see this HUGE change as good and bad (isn’t everything?). The good side effect of this transition is that Medicaid recipients who suffer mental health and/or substance abuse will have their physical health taken care of by the same MCO that manage their mental health and/or substance abuse services. Despite, this positive side effect, we all know that whenever NC Medicaid is OVERHAULED, consumers fall between cracks on a large scale. Let’s just hope that this transition will be easier than past transitions.
Dave Richard, Deputy Secretary NC Medicaid, NCDHHS, gave a presentation today for the NCSHCA. He said that the transition to MCOs was rocky. What does he think will happen when we transfer to the Tailored Plan?
I think I may ask him whether he thinks whether the MCOs are doing a good job, presently.
He’s a great presenter.
He said that the hospitals have come together in the last 4 weeks. He said that we will see something in the media on Monday.
He wants to expand Medicaid because his agency DHHS would be awarded $1.5 Billion over the course of 2 years. Of course, he wants to expand. He has no idea that the MCOs are “terminating at will” providers within the catchment areas in a disproportionate and discriminatory way.
We are close to expansion, he said. 80%, he guessed. “Expansion is really important.”
Not if there are not enough providers.
I did not ask him my question.
Today Mr. Richard had to get a bunch of data from the “new plans.” We are 2 1/2 months away, and he said they are not prepared yet, but hopes to be prepared by December 1, 2022. They still have the discretion to “pull the plug.” He’s worried about a lot of providers who have invested a lot of money to get compliant and ready for the transformation – that they won’t get paid.
“We have 5 really, strong Standard Plans,” he said. Most Medicaid recipients will choose the 5 Standard Plans,
Attorney from the audience: “We have to raise reimbursement rates.” There is a staffing crisis, the attorney, emphasized.
Mr. Richard stated that there will be a raise, but no indication of how much.
Finally, I did ask him his opinion as to whether he thinks the MCOs are doing better now than when the transformation happened (back in 2010-ish).
He said, that nothing is perfect. And that other Medicaid Deputy Secretaries think very highly of NC’s program. I wonder if he’ll run for office. He would win.
The guy next to me asked, “What is the future of the Tailored Plans when they go out of business in 4 years?”
Mr. Richards said that there needed to be competition for being the “big dogs.”
Auditing Medicare Advantage Organizations – About Time!
The American Hospital Association (“AHA”) is asking the Department of Justice (DOJ) to look into health insurance companies that routinely deny patients access to care and payments to providers. I’d like a task force as well. This is exactly the problem I have witnessed with managed care organizations or MCOs. In traditional Medicare and Medicaid, MCOs are prepaid and make profit by denying consumers medical care, terminating provider contracts, and not paying providers for care rendered. Congress created the same scenario with Medicare Advantage. Individuals can elect coverage through private insurance plans. While MA has been wildly successful and popular, the AHA is complaining that too many people are getting denied services.
An OIG report that was published in April cites MAOs as denying services for beneficiaries. We are always talking about providers getting audited, it is about time that the companies that are gateways for providers getting reimbursed and beneficiaries getting medically necessary services are likewise audited for denying services. It seems ironic that providers are audited for potentially billing for too many services and these gateway, third party reimbursement companies are audited for providing too few services – or denying too many prior authorizations. But if the MCO or MAO deny medical services, then the money that would have been paid to the provider stays in their pocket.
The OIG report found that many MAOs delay or deny services despite those services meeting Medicare prior authorization criteria, approximately 13-18%. Almost a 20% wrongful denial rate. When these MAOs get tax payer money for a Medicare beneficiary and deny services those tax dollars stay in the MAO’s pockets.
Supposedly MAOs approve the vast majority of requests for services and payment, they issue millions of denials each year, and OIG’s audit of MAOs has highlighted widespread and persistent problems related to inappropriate denials of services and payment. As enrollment in Medicare Advantage continues to grow, MAOs play an increasingly critical role in ensuring that Medicare beneficiaries have access to medically necessary covered services and that providers are reimbursed appropriately.
According to the OIG report, MAOs denied prior authorization and payment requests that met Medicare coverage rules by: (1) using MAO clinical criteria that are not contained in Medicare coverage rules; (2) requesting unnecessary documentation; and (3) making manual review errors and system errors.
Personally, I am fed up with these private, insurance companies denying services and keeping our tax dollars. It is about time the insurance companies are audited.
Medicare Appeals: When It Comes To Appealing, Beneficiaries May Be Key!
Today I want to discuss the Medicare appeal process and its faults. Upon undergoing a Medicare audit by Safeguard or whichever auditor contracted by CMS, a provider usually receives a notice of overpayment. The 5-level appeal process is flawed as the first two levels rubber-stamp the findings. After the second level of appeal – the QIC level to the ALJ – recoupment occurs unless the provider set up an extended repayment schedule (ERS) or files for an injunction in federal court based on a taking of a property right; i.e., the right to reimbursement for services rendered.
Everyone deserves to be paid for medically necessary services rendered. The conundrum here is that the circuit courts are split as to the protections a provider deserves.
Whenever a federal injunction is filed, the Defendant auditor files a Motion to Dismiss based on (1) failure to exhaust administrative remedies and that the Medicare Act requires the administrative process; therefore, the federal court has no jurisdiction. The provider will argue that the federal action is ancillary to the substantive issue of whether the overpayment was in error and that its protected property right is being taken without due process.
A new case rendered October 1, 2021, Integrity Social Work Services, LCSW, LLC. V. Azar, 2021 WL 4502620 (E.D.N.Y 2021) straddles the fence on the issues. The EDNY falls within the 2nd circuit, which is undecidedly split. The 5th Circuit is, as well, split. District courts across the country are split on whether Medicare providers have a protected property interest in Medicare payments subject to recoupment. Several courts have found that the Medicare Act does create such a property right, including NC, 4th Circuit, Texas, Florida, Ohio, and Illinois, to name a few.
This provider was accused of an alleged overpayment of about 1 million. It argued that because it will not receive a prompt ALJ hearing that it will be driven out of business. This is a harsh and unacceptable outcome that readily occurs in about half the states. Providers should be aware of which State in which it resides and whether that State upholds a providers’ property interest in reimbursements for services rendered.
The Integrity Social Work Court found that, yes, jurisdiction in federal court was proper because the claims were ancillary to the substantive claims that would be heard by the ALJ. The provider was asking for a temporary stay of the recoupments until an ALJ hearing was concluded. As you read the case, you get false hope on the ruling. In the end, Judge Peggy Kuo found “Nor is the process to contest an overpayment or a recoupment decision arbitrary, outrageous, or even inadequate.”
Respectfully, I disagree. As does half the other courts. See, e.g., Accident, Injury & Rehab., PC v. Azar, No. 4:18-CV-2173 (DCC), 2018 WL 4625791, at *7 (D.S.C. Sept. 27, 2018); Adams EMS, Inc. v. Azar, No. H-18-1443, 2018 WL 3377787, at *4 (S.D. Tex. July 11, 2018); Family Rehab., Inc. v. Azar, No. 3:17-CV-3008-K, 2018 WL 3155911, at *4-5 (N.D. Tex. June 28, 2018). Juxtapose other courts have found that no such property interest exists. See, e.g., Alpha Home Health Solutions, LLC v. Sec’y of United States Dep’t of Health & Human Servs., 340 F. Supp. 3d 1291, 1303 (M.D. Fla. 2018); Sahara Health Care, Inc. v. Azar, 349 F. Supp. 3d 555, 572 (S.D. Tex. 2018); PHHC, LLC v. Azar, No. 1:18-CV-1824, 2018 WL 5754393, at *10 (N.D. Ohio Nov. 2, 2018); In Touch Home Health Agency, Inc. v. Azar, 414 F. Supp. 3d 1177, 1189-90 (N.D. Ill. 2019).
Providers – If you bring a claim to cease the recoupment, also sue on behalf of your Medicare beneficiaries’ property rights to freedom of choice of provider and access to care. Their rights are even stronger than the providers’ rights. I did this in Bader in Indiana and won based on the recipients’ rights.
Medicare Consumers May Be Great House-Flippers: Keep Your Mind Wise
I have a guest blogger today – what an honor! Teresa Greenhill is the co-creator of MentalHealthforSeniors.com, which is dedicated to providing seniors with information on physical and mental fitness. Being a senior herself, Teresa, with some help from her granddaughter, manages the website as a way to keep her busy and help other seniors be active and happy in their golden years.
Teresa’s blog today is about Medicare consumers creating a “senior” business…make money as a senior! Think it can’t be done?? Read Teresa’s blog below.
Breaking Into the House-Flipping Business: A Guide for Seniors
House-flipping can be a lucrative and rewarding venture for seniors. Maybe you are a retiree looking for a second career. Maybe you’ve always wanted to get competitive in the world of real estate. Or maybe you’re just trying to stay occupied and active while bringing in a little extra cash. Whatever the case, if you’re considering trying your hand at house-flipping, here are some of the basics you should know.
Seniors tend to thrive in the field of real estate.
Success in real estate can hinge very much on how well you deal with people. And this is something that many seniors have become adept at, over the years. You’ve probably had your share of managing difficult personalities. You can often anticipate issues before they arise. And most importantly, your own life experience sets you up to empathize with what others may be going through. Individuals who are selling or buying a home will appreciate the chance to deal with someone who is competent and calm, and who understands their worries. The bonus for seniors is that the work is relatively undemanding and allows you to set your own schedule.
You don’t need to be a real estate agent.
You don’t need to train to be an agent, or be certified as an agent, in order to get into flipping houses. That doesn’t mean there aren’t benefits to getting your real estate agent’s license, however. As a licensed agent, you will save money on commissions. You will also have better and earlier access to real estate listings. And being educated in the ins and outs of home buying and selling will make the entire process run more smoothly for you.
You will need to start with a certain amount of funding.
House-flipping is not one of those fields you can leap into without preparation, and this includes financial preparation. Before you decide that house-flipping is right for you, check to see whether you are financially ready to make a good start. The biggest expense you will face is the acquisition cost, which will vary depending on location, the size of the property, and its condition. You will also have to deal with renovation expenses and property taxes. Other costs involved in house-flipping include utilities, inspections, permits, and closing costs. So yes, this is a field that is easier to break into if you have plenty of cash on hand. But seniors who don’t have much expendable income still may be able to get a bank or home equity loan to start off.
Should you buy fixer-uppers?
When going into house flipping, the idea is that you will sell a house for more than you spent on it – so, yes, some renovation is a given. But there’s a limit to how much renovation and repair is a good idea. Even a home that looks decent at first glance could have a host of problems including expensive issues pertaining to the foundation, the roof, or the structure itself. Look out for mold, asbestos, termite damage, and wiring problems. A good choice is a home that will benefit immensely from less expensive aesthetic updates such as a good paint job, new cabinets, or improved landscaping. Of course, much depends on how skilled you are at home renovations and repairs, yourself.
Will you have to hire employees?
If you plan on making this a business, you may want to bring on more permanent hires. Or you may prefer simply to deal with contractors. Either way, make sure you hire individuals or companies that have good reviews and are well regarded. Don’t forget that you will need to manage payroll, as soon as you start hiring others. So make sure anyone you bring on fills out the appropriate paperwork, and have an organized system for paying them promptly and correctly.
If you feel you have what it takes to succeed at – and enjoy – house-flipping, this may be the beginning of an exciting new phase in your life. Just be sure you are well informed, and sufficiently financially equipped to get your start safely. If you are a senior interested in real estate and also have legal questions pertaining to Medicaid or Medicare in the Raleigh area, contact Knicole C. Emanuel of Medicaid Law NC.
Provider Medicaid Contract Termination Reversed in Court!
First and foremost, important, health care news:
The Medicare Administrative Contractors (MACs) have full authority to renew post-payments reviews of dates of service (DOS) during the COVID pandemic. The COVID pause is entirely off. It is going to be a mess to wade through the thousands of exceptions. RAC audits of COVID DOS will be, at best, placing a finger on a piece of mercury. I hope that the auditors remember that everyone was scrambling to do their best during the past year and a half. In the upcoming weeks, I will keep you posted.
I am especially excited today. Last week, I won a permanent injunction for a health care facility that but for this injunction, the facility would be closed, its 300 staff unemployed, and its 600 Medicare and Medicaid consumers without access to their mental health and substance abuse providers, their primary care physicians, and the Suboxone clinic. The Judge’s clerk emailed us on Friday. The email was terse although the clerk signified that the email was important by clicking the little, red, exclamation point. It simply stated: After speaking with Judge X, she is dismissing the government’s MTD and granting Petitioner’s permanent injunction. Petitioner’s counsel can send a proposed decision within 10 days. Such a simple email affected so many lives!
We hear Ellen Fink-Samnick MSW, ACSW, LCSW, CCM, CRP, speak about social determinants of health (SDoH) on RACMonitor. Well, this company is minority-owned and the mass percentage of staff and consumers are minorities.
Why was this company on the brink of closing down? The managed care organization (MCO) terminated the company’s Medicaid contract. Medicaid comprised the majority of its revenue. The MCO’s reason was that the company violated 42 CFR §455.106, which states:
“Information that must be disclosed. Before the Medicaid agency enters into or renews a provider agreement, or at any time upon written request by the Medicaid agency, the provider must disclose to the Medicaid agency the identity of any person who:
(1) Has ownership or control interest in the provider, or is an agent or managing employee of the provider; and
(2) Has been convicted of a criminal offense related to that person‘s involvement in any program under Medicare, Medicaid, or the title XX services program since the inception of those programs.”
The former CEO – for years – he relied on professional tax accountants for the company’s taxes and his own personal family’s taxes. His wife, who is a physician, relied on her husband to do their personal taxes as one of his “honey-do” tasks. CEO relied on a sub-par accountant for a couple years and pled guilty to failing to pay personal taxes for two years. The plea ended up in the newspaper and the MCO terminated the facility.
We argued that the company, as an entity, was bigger than just the CEO. Quickly, we filed for a TRO to keep the company open. Concurrently, we transitioned the company from the CEO to Dr. wife. Dr became CEO in a seamless transition. A long-time executive stepped up as HR management.
Yet, according to testimony, the MCO terminated the company’s contract when the newspaper published the article about CEO’s guilty plea. The article was published in a local paper on April 9 and the termination notice was sent out April 19th. It was a quick decision.
We argued that 42 CFR §455.106 didn’t apply because CEO’s guilty plea was:
- Personal and not related to Medicare or Medicaid; and
- Not a conviction but a voluntary plea agreement.
The Judge agreed. We won the TRO for immediate relief. After a four-day hearing and 22 witnesses for Petitioner, we won the preliminary injunction. At this point, the MCO hired outside counsel with our tax dollars, which I did bring up in the final hearing on the merits.
New outside counsel was super excited to be involved. He immediately propounded a ton of discovery asking for things that he already had and for criminal documents that we had no access to because, by law, the government has possession of and CEO never had. Well, new lawyer was really excited, so he filed motions to compel us to produce these unobtainable documents. He filed for sanctions. We filed for sanctions back.
It grew more litigious as the final hearing on the merits approached.
Finally, we presented our case for a permanent injunction, emphasizing the importance of the company and the smooth transition to the new, Dr. CEO. We won! Because we won, the company is open and providing medically necessary services to our most needy population.
And…I get to draft the proposed decision.
